In order to extend its hardware growth strategy into mobile devices, China’s Alibaba Group is planning to buy a minority stake in Chinese smartphone maker Meizu for a deal amount of $590 million.
As per a Bloomberg report, “The investment in Meizu represents…an important step in our overall mobile strategy as we strive to bring users a wider array of mobile offerings and experiences,” said Wang Jian, Alibaba’s chief technology officer, in the statement.
The deal will help Meizu to further develop its smartphone businesses and smart device ecosystem and also represent an significant expansion of Alibaba Group ecosystem by pushing its mobile operating system within China through Meizu’s handsets.
Zhuhai-based Meizu sold 1.5 million smartphones last month, the company’s phones use chips from MediaTek Inc., displays from Sharp Corp. and camera sensors from Sony Corp. Now, Alibaba wants to promote its operating system and will integrate the Meizu’s smartphone hardware with Alibaba YunOS software, as it tries to capture a share of China’s 557 million smartphones users. Alibaba’s now worth USD 211 billion by market value, it has struggled to expand its software reach in China, where 9 out of 10 mobile devices runs on Google’s Inc. Android Software.
Alibaba’s past mobile investments include a USD 280 million round for messaging app Tango, USD 120 million in US based mobile games startup Kabam, and a recent USD 10 million investment in Android games console maker Ouya. It is possible that Alibaba will make further investments in other smartphone makers in the future, as well.